why don't they GET IT!?

[jhain]

I watch with utter disbelief as 'my fellow Americans' buy into ( literally) this Admin's great new SS ideas. UGH.

This was in the Atlantic City Press today- and I was able to find it online just now . (Hopenit is not a dupe)- wish I could give a copy to every single person in the country. It is simple enough. Why don't they GET IT!?

http://www.latimes.com/news/opinion/la-oe-scheer21dec21,1,5260200.column?coll=la-util-op-ed

Just my luck: I finally get to be a senior citizen only to discover that the president considers my longevity a grave threat to the nation. Apparently, my collecting Social Security checks for as long as I have left on this Earth is going to help bankrupt the economy and/or be an unbearable burden on young Americans.

[Name removed]

1. Deleted message

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[Lydia Leftcoast]

2. The only "modification" that needs to be made to keep SS going

indefinitely is to raise the cap on the amount of salary subject to FICA payments to perhaps $200,000 instead of the current $89,000.

The only reason the young don't trust the system is that they've grown up being steadily propagandized in sound bites of "SS won't be there for you."

[bryant69]

3. THis is exactly right

The conservatives in this nation are trying to scare the pants off America so we'll buy into their plan to destroy Social Security.

Bryant
Check it out --> http://politicalcomment.blogspot.com

[ProfessorGAC]

4. The Correct Answer, Lydia, Is $500k at 6%

The fund will NEVER go broke if every wage earner paid 6% up to a half-million. And, this would lower the burden on middle class, working poor, and the small corporations by lowering the fraction on 95+% of workers. The total revenues would increase by about 4.8% yearly versus current projections.

That would stabilize the system, with benefits as is, until at least 2100.
The Professor

[Worst Username Ever]

6. Regressive tax?

Would it not be ideal if, in fact, this were a progressive tax instead of a regressive flat-tax?

Of course, those in the lower brackets are more likely to benefit from SSI, so I can see why a higher proportion of their income dollars may be appropriate, but those in the higher brackets would be drawing larger checks, too...

[ProfessorGAC]

9. Yeah, But I Didn't Do The Math That Way

I support a progressive taxation system, for sure. But, i already lowered the rate to make it easier on the poor, middle class, and small business owners.

And since high wage earners would now pay on over $410k they don't pay now, the impact would be almost the equivalent of a progressive tax, at least in the short term.

I think the problems of progressive payrool tax, from an accounting perspective would make passing such a measure difficult. But, it would be fairly easy to just lower the percentage and raise the ceiling significantly.

It's not ideal, you're correct. But, it's better than now. Baby steps!
The Professor

[SammyWinstonJack]

24. That is a viable solution and would certainly work if bu$h* really wanted

to fix the "problem" with regard to SS, but of course he doesn't. He wants to turn SS monies over to his Wall Street Corrupt Corporate Campaign Contributing buds. It's payback time for Wall Street from bu$hCo.

[Worst Username Ever]

7. The government uses SS funds to cover portions of it's spending.

We are not told about this, but it has been going on for 30+ years. SS is, in fact, funded by t-bills (IOUs) that will have to be funded by federal tax dollars somewhere down the line. Getting rid of this little number would go a long way towards saving SS, IMO.

[wormhole]

5. what do you mean?

If the money I put into SS can get even 1/10 the returns the money I've put into my 401k - then I'm all for it.

401k's out perform SS to the point that the money I put each check into SS seems like a serious waste of my investment potential.

[Bandit]

8. You need to explain that because I don't believe you

If you retire at sixty-five with full benefits you will recieve fourteen hundred a month for the rest of your life. That is seventeen thousand dollars a year for at least twenty years. I doubt you paid anything near that from your payroll deductions.We are talking about three hundred and thirty six thousand dollars if you draw for twenty years. If you were paid thirty thousand a year your payments were only one thousand eight hundred a year. If you worked for thirty years you would have paid fifty four thousand dollars and gotten back all most four hundred thousand. Over seven hundred percent return on investment.

[ProfessorGAC]

10. He Couldn't Have Paid That

Less than 8% of less than $90k is only about $7k per year. So, the return is 100% on what is paid in. No, that's not as good as the stock market, but it's a virtually guaranteed return, which markets don't have. Over a 40 year period, that would be about 1.75%. If, the poster has been getting 17.5% return on 401k investments, i'd suggest he's reading the equity sheets wrongly.

So, this poster hasn't done the math very well.
The Professor

[Bandit]

13. I was being very general

SS right now is 6.2% of payroll up to $89,000. That comes to $5518. per year if he has the maximum payroll. Over forty years that comes to $220,720. he paid in. the maximum amount allowed by law. If he collects for twenty years he would receive $336,000. It isn't quite double his money but then again like you said it is guaranteed. There is absolutely no risk and as another poster pointed out there are other considerations as well, like disability. I don't really consider SS to be a bad deal at all. Ask ex Enron employees how their 401K's are doing about now.

[ProfessorGAC]

14. I Was Agreeing With You

I think we were in complete agreement. It was he with whom i had issue.

Are you sure about that 6.2%? I thought it was more like 7 2/3rds percent.
The Professor

[ieoeja]

22. 5449.80

Don't know the percentage. But I passed the cap for the year in late November and paid $5,449.80 total.

Using SSA's online calculator and punching in an annual income of $10 mil each year since birth, I found the following maximum benefits:

Age of Retirement / Monthly (Annual) Maximum Retirement / % (%)
62 / 1473 (17676) / 94% (150%)
66 / 1967 (23604) / 92% (141%)
67 / 2110 (25320) / 90% (137%)
68 / 2282 (27384) / 89% (134%)
69 / 2454 (30540) / 86% (129%)
70 / 2626 (31512) / 83% (123%)
75 / 2638 (31656) / 39% (56%)
78+ / 2642 (31704) / 15% (21%)

% = SSA payments by age 80 as % of (max contribution X age)
(%) = SSA payments by age 80 as % of (max contribution X (age - 23))

So that last figure is the return if you walked out of 4 years of college straight into a job exceeding the cap and then die at 80.

Of course, if you walked out of 4 years of college straight into a job exceeding the cap -and- you do not become disabled -and- you're not a complete idiot ... then you won't be needing social security. Then if you believe that your standard of living is completely divorced from that of the society in which you live, I suppose you would be pissed about paying into something that returns you no practical benefit. But then if that is what you believe, why didn't you move to a third world country where they don't have stuff like social security, minimum wage, etc that don't provide you any direct benefit? Have you ever considered that the standard of living enjoyed by the wealthy in this country might actually be so high because the standard of living by the country as a whole is high?

Disclaimer: by "you" I do not mean Professor GAC. I am referring to the royal You.

[ThomasJackson]

16. double the calculation

the actual amount contributed is 12.4%. 6.2% from the individual and 6.2% from the company. BUT .... as far as the company is concerned, that $ is what it costs to employ an indivudal. it is unimportant to them whether they pay SS or the employee. that other 6.2 % is YOUR money the company pays to SS. So double his contributions. pays in 441440, gets 336000. losing $

[Tyler Durden]

11. I want YOUR job.

1/10 the returns.

So, by most current estimates (about $300 thou over 20 years), you've put away enough to get returns of over $3 MILLION.

Let's see now:

Over a working career of say, 40 years, you're putting away BETTER than $2 million if your return is an astronomical 150% over the life of your 401k. That's, what, $50 thou in SAVINGS per year.

Sorry friend, but if you make that much, you're part of the PROBLEM, not the SOLUTION.

[idiosyncratic]

12. People who make these comments NEVER think about disability

An acquaintance just rolled his BMW Z3 and is now a quadraplegic.

His Social Security will be welcomed. If illness or accident disabled you, would your contributions to your 401k pay you enough?

There are many, many ways to fix Social Security. Means testing is one.

I just learned about someone whose pension is going to be more than $100,000 per month. Does that person really need the $1000/mo. Social Security check?

They certainly don't need the annual COLA. Just denying that increase to very wealthy individuals would make a difference in Social Security's bottom line.

[ThomasJackson]

15. why don't you Get It?!?

The SS system is in deep trouble. anybody with a calculator can see that. the PRESENT VALUE of the shortfall is over $3trillion dollars. that means that to put the system on sound footing would take CASH MONEY 3 trillion dollars TODAY to insure that the revenues = expenditures ... just like a real retirement plan. by way of comparison, the entire GDP of the USA is 10 or 11 trillion.

the actuaries who go on and on about the system being solvent out to 2040 or there-abouts are counting as assets the pseudo-t-bills that were issued to the SS system when big spending congresses dipped into the SS surplus. i say these are pseudo t-bills beacuse unlike real t-bills, the SS system can't sell them in the market to raise actual cash money.

this means that the treasury department - currently in hock for about a gazillion dollars this year, agrees to pay the SS system 1.5 trillion dollars in redemption of these pseudo-bills. the phrase robbing peter to pay paul ring a bell with anybody?

[Bandit]

19. That is just plain BS

SS is still to this day running a surplus. Bush* has taken that surplus and given it to the very wealthy but the actual program is still in surplus. Granted if you continue on without any changes in about forty years it will start running a deficit. It is currently not doing so as your post would indicate.

[ThomasJackson]

20. sorry bandit

but you are right and wrong, surplus on paper, but no money. any extra cash gets moved over to the general budget. been that way for years and years. when the funds are moved, SS gets a "t-bill like" asset. ( but one they cannot sell ) from the treasury. system has a "surplus" in name only. there is no actual money.

[ieoeja]

23. You are correct (sort of).

By some estimates SS could ultimately lose $3 trillion dollars. This assumes:

Economic growth over the next four decades is only half of that over the past four decades.

Nothing is changed, like increasing the $89k cap on which SSA is currently withdrawn.


If you altered that first assumption to economic growth over the next four decades being three quarters of historical growth, SS loses less than $1 trillion. And as you yourself pointed out, this does not include the $1.5 trillion already owed to SS from the General Fund. So using that 3/4 figure for economic growth SS in and of itself will never lose money. Rather, Republican deficits outside of SS have eaten up the SS surplus.

[AllegroRondo]

17. Bush claimed SS would go bankrupt in 1978

when he was running for congress in 78, he claimed SS would go bankrupt in 10 years if it wasnt privatized. He was wrong then, and wrong now.

[Name removed]

18. Deleted message

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[AllegroRondo]

21. You mean he WASNT WRONG THEN?

thanks for enlightening me.

Not.